This American Idol's Remodeling Mistake Should Be A Cautionary Tale

Every dog has its day, like the old saying goes, but for singer
David Cook and his dog, they’ve seen better ones.

When the American Idol idol was dropped by his record label last
year, Cook pulled up stakes at his Los Angeles/Beachwood Canyon
home, heading back to greener pastures in his home state of
Missouri.

Cook’s 3-bedroom, 3-bath, 3,071-square-foot abode — with the
sweet view of the Hollywood sign — should have demanded top
dollar.

But to add insult to the injury of leaving Tinseltown, Cook was
unable to sell the palatial pad for his $1.495 million asking
price. Instead, he settled on a lesser, $1.399 million deal. What
was the reason?

According to Realtor.com, the house boasted an open floor plan,
wood flooring, skylights, a master suite with its own private
floor, and a private recording studio.

Top dollar digs, for sure — Zillow.com even estimated Cook’s
monthly mortgage loan payment at $4,863
(assuming 20% down on a 30-year FRM).

Some speculate that the lackluster sale was Cook’s overzealous
over-customizing for his dog that dwindled interest and plummeted
the price.

The spacious yard reserved for his dog was larger than three of
most people’s real backyards, combined. Cook isn’t alone in
the custom homes department —
enthusiast pilot John Travolta’s got an airplane hangar attached
to his home, and singer Beyonce sports a sparkle-encrusted
bathtub.

The truth is, over-customizing lowers a home’s resale value. What
one homeowner considers treasure is another’s trash. It doesn’t
matter how affordable the carefully customized home
renovations are; if they’re too difficult to
maintain, don’t fit into buyers’ lifestyles, or are just plain
tacky, making your home too “niche” can discourage
potential buyers.

Before you think about digging that 100-yard-long swimming pool
flanked by gold columns, take a look at this list before going
overboard on the over-customizing.

Custom Home Designs: When Too Much Really is Too
Much

These “home improvements” are
bona fide value killers and will not impress a real estate agent
or anyone you hope to sell your home to.

1. Over-customized/generally tacky exteriors

There are exceptions, like turning your house into a billboard to
help save it from foreclosure. Any other reason to paint
your house neon green is out of character with your community and
is just asking for its value knocked down a few hundred thousand
dollars.

“This kind of house will be extremely difficult to sell because
potential home buyers won’t be willing to spend the time and
money to redecorate it to their liking,” says Credit Sesame.

If you must go against the neighborhood grain, stay with safer,
neutral paint colors and tasteful add-ons that hold more general
appeal to buyers.

2. Wall-to-wall carpeting

In the 1970s, a house full of lush, cut-pile shag carpeting may
have worked wonders for a home’s value and appeal. In 2013, it
can bring your home’s resale value down. Why? According to both
Credit Sesame and Jean Folger of Investopedia, carpeting is
expensive to purchase, install and maintain.

(If you have kids, think of all the spilled messes to clean; for
pets, all the trapped allergens.) Plus, like your house’s paint
job, the design and color of your interior carpeting makes a big
difference in how appealing, and valuable, your home is (or
isn’t).

Carpeting is not a floor’s enemy, mind you — so if you do prefer
it, decorate with a mix of carpet, hardwood floors and tiles.
Area rugs also work well for the budget conscious.

3. Niche rooms and big-ticket upgrades

We’ve seen them in plenty of houses before: that
state-of-the-art, high-tech home theater. In the next room, the
most antiquated kitchen or bathroom this side of the 19th
century. Custom home designs, by and large,
work best when they’re carried out altogether, or not at all.

“High-quality upgrades generally increase the value of high-end
homes,” notes Folger, “but not necessarily mid-range houses,
where the upgrade may be inconsistent with the rest of the home.”

And what guy wouldn’t like to have his own man cave? If it means
dropping the value of your home, you might want to reconsider.
Here’s the consumer rationale:

Invest money into a high-end add-on, like a wine cellar,
basketball court or rock climbing room.

Watch your home’s value grow from said investment.

Expensive add-ons don’t class up a middle-class home and give it
little to no new value. “Even if you upgrade a house to a value
of $400,000 in a $250,000 neighborhood,” says Credit Sesame,
“potential home buyers probably will not be willing to pay
substantially more than the most expensive house in the
neighborhood. The house will continue to seem overpriced, even if
it appears to be more desirable than other homes in the area.”

4. Swimming pools

Location makes a difference with a pool. What demands value in
California, Arizona or Florida calls for less in Montana, for
example. Swimming pools may not seem like a big home value
liability, but they are: home renovation
costs to install an in-ground pool is $10,000, says
Credit Sesame; maintenance costs average $1,500 annually.

They can also be a safety hazard for homeowners with small
children: “Many potential home buyers view swimming pools as
dangerous, expensive to maintain and a lawsuit waiting to
happen,” says Investopedia.

5. “Invisible” renovations

“Invisible improvements are those costly projects that you know
make your house a better place to live in, but that nobody else
would notice — or likely care about,” Folger explains.

Necessities like new central heating, air conditioning, or
plumbing may seem like a good idea — or even be mandatory — but
they don’t mean squat when it comes time to sell your home.

The unfortunate reason is that home shoppers don’t consider these
items luxuries, or even amenities — they’re just regular pieces
of a home they won’t consider paying extra cash for. “It may be
better,” notes Investopedia, “to think of these improvements in
terms of regular maintenance, and not an investment in your
home’s value.”

When Home Improvements Go Right

According to Zillow, homes in the Pacific U.S. — Alaska, Hawaii,
California, Oregon and Washington — have the highest average
cost-value ratio in the U.S., at 71.3%, because the high costs to
remodel on the West Coast is balanced out by high resale values.

In findings from the National Association of Realtors and
Remodeling, Zillow reports that seven of the top 10 most
cost-effective home renovations are
exterior home improvements. Fiber-cement
siding replacement, the report showed, holds the most return
value, with 78% of costs recovered at resale.

Steel entry door replacement — the cheapest on the list at $1,200
— retains 73% of its value, and low-end kitchen remodels, at
$20,000, hold over 72% of their value at home resale, too.

So if splurging on custom built
homes is a bit out of your wallet’s price league,
don’t go to the other extreme and pay for renovations that lose
your house money when it comes time to sell. You may be stuck
with them and the mortgage forever, fulfilling another old
adage:

“Be careful what over-customized add-ons you wish for; you might
just get them.”